Accounting 2001

Which of the following is an external user of accounting information? Managers. Finance directors. Company officers. Labor unions.

Managers.

All of the following statements are correct except A vital element in communicating economic events is the accountant's ability to analyze and interpret reported information. The information that a user of financial information needs depends upon the kinds of decisions the user makes. Good decision-making depends on good information. The origins of accounting are generally attributed to Socrates, a classical Greek philosopher, who promoted accounting as a social contract.

The origins of accounting are generally attributed to Socrates, a classical Greek philosopher, who promoted accounting as a social contract.

In order to increase comparability, in recent years, the FASB and IASB have made efforts to reduce the differences between U.S.GAAP and IFRS through a process known as the fair value principle the cost principle monetary unit assumption convergence

convergence

The final step in solving an ethical dilemma is to identify the alternatives and weigh the impact of each alternative on stakeholders. recognize the ethical issues involved. identify and analyze the principal elements in the situation. recognize an ethical situation.

identify the alternatives and weigh the impact of each alternative on stakeholders.

The starting point of the accounting process is communicating information to users. identifying economic events. recording economic events. none of these answers are correct.

identifying economic events.

The cost of an asset and its fair value are irrelevant when the asset is used by the business in its operations. the same on the date of acquisition. the same when the asset is sold. never the same.

irrelevant when the asset is used by the business in its operations.

A business organized as a corporation is owned by its stockholders. terminates when one of its original stockholders dies. is not a separate legal entity in most states. requires that stockholders be personally liable for the debts of the business.

is owned by its stockholders.

John and Sam met at law school and decide to start a small law practice after graduation. They agree to split revenues and expenses evenly. The most common form of business organization for a business such as this would be a proprietorship. corporation. partnership. joint venture.

partnership.

The accounting process involves all of the following except -analyzing and interpreting financial reports. -recording non-quantifiable economic events. -identifying economic transactions that are relevant to the business. -communicating financial information to users by preparing financial reports.

recording non-quantifiable economic events.

Financial information that is capable of making a difference in a decision is faithfully representative. generally accepted. relevant. convergent.

relevant.